American Oil and Gas Reporter - March 2024 - 25

Examining The Intricacies
Of Federal Permitting
Complicates Surge Claim
Recent claims suggesting that the Biden administration has
granted 50% more oil and natural gas drilling permits on federal
land compared with the Trump administration have circulated
in the media-and although that data is accurate, the bigger
permitting picture is worth a look. Closer examination of 2023
data reveals that many of the permits approved by the Biden administration
were granted on land that was leased during the
Trump administration. The Biden administration, on the other
hand, has kept lease sales to an absolute minimum.
Viewed in that light, claims of mass permit approval from
the Biden administration more accurately reveal the lag time in
processing the glut of permits pending before the U.S. Department
of Interior.
Understanding the intricacies of federal land permitting is
crucial to provide context for permitting data. The multi-year,
multi-step process for developing federal land can span several
administrations and requires a multitude of different evaluations,
approvals and permitting steps before energy production can
even begin.
Before entering the permitting phase, there is a comprehensive
and lengthy protocol for the pre-leasing and exploration stages.
This process, which can last a decade, includes in-depth environmental,
seismic and production analyses to ensure viability. Legal
challenges from environmental activist groups at nearly every
stage can add additional years to the already lengthy procedure.
At the end of Fiscal 2020, shortly before President Biden
took office, a total of 6,234 applications for permit to drill were
awaiting approval. Recent reports claim that in the last three
years, the Biden administration has approved 9,522 APDs-
which would make up the permit backlog, and then some.
Nevertheless, the latest U.S. Bureau of Land Management
data shows 5,366 APDs are pending approval before the agency.
In part because of the Biden administration's massive leasing
slowdown, BLM had received a paltry 452 new APDs year-todate
as of October 2023-which indicates the chilling effect
that the bureaucratic slog can have on the industry.
Remember, one of Biden's first moves as president was to
pause federal lease sales, which meant the number of leases for
development on federal land slowed significantly compared
with previous administrations. Delays in sales, ongoing appeals
and settlements with activist groups further contribute to the
decline. New Mexico, North Dakota and Colorado are among
the states to see lease sales postponed or canceled, with
significant economic consequences. This impact has shrunk
local and state revenues and hit budgeting, particularly for
these states that rely heavily on oil and gas revenue.
Meanwhile, the Biden administration also settled with activist
groups and agreed to re-evaluate the National Environmental
Policy Act reviews for nearly every lease issued under the Trump
administration in Wyoming, as well as a significant number across
Utah, Colorado, New Mexico and Montana. As the Wyoming
Tribune Eagle explained back in 2022 when the news broke:
" The pace of the Biden administration's oil
and gas leasing isn't merely slow-it's the
slowest in half a century.
"
" None of the leases have been vacated, but their future is uncertain.
The Department of the Interior now has to reevaluate
and retroactively justify more than two dozen lease sales. If it
decides it can't, or its reasoning doesn't satisfy the court, the
sales could be reversed and any existing permits revoked. "
The pace of the Biden administration's oil and gas leasing
isn't merely slow-it's
the slowest in half a century. A Wall
Street Journal analysis of federal acres leased for oil and gas
production during the past 50 years reveals that the administration
leased a historic low of 0.13 million acres during its first 19
months compared with the 4.4 million acres auctioned for lease
during the first year and a half of the Trump presidency.
Similarly, the Biden administration has approved a record
low number of new offshore oil wells, in addition to including
the lowest number of offshore wells in history in the muchdelayed
five-year offshore leasing program.
Despite onshore lease sales' limited acreage offerings,
industry interest and high-dollar bids persist, which underscores
how important federal leases are to U.S. energy production.
Federal lands and waters are responsible for approximately
24% of total U.S. oil production.
Although declining lease sales have not yet caused acute
domestic supply problems, their decrease inevitably will diminish
future production and supply, potentially exacerbating shortages
and price surges. This trend not only threatens energy security, but
also blocks future revenue to federal, state and local treasuries.
We welcome the progress the administration has made in
tackling the federal permitting logjam, but it is only one part of
the overall story of federal energy production. Mixed messages
from the administration-such as canceling lease sales one
minute and touting its APD approvals in the next-create uncertainty
within the energy industry, hindering long-term investments
and exacerbating challenges for the United States. ❒
MALLORI MILLER is vice president
of government relations
for the Independent Petroleum
Association of America, focused
primarily on federal land development.
She maintains friendly
communications with legislators
and key Department of Interior
officials and policymakers, advisers,
journalists and others.
MARCH 2024 25
American Oil and Gas Reporter - March 2024

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